巨灾债券是缩小保障缺口的关键

2017年10月25日 Intelligent Insurer 原始采访译文。 PDF版本在这里

承保透明且容易理解的的巨灾债券(包括使用指数触发的债券)可能成为新兴经济体的一种最有效的风险转移工具,并在宏观层面上解决保障缺口的问题。Phoenix CRetro 首席执行官基里尔·萨夫拉索夫 (Kirill Savrassov),百慕大ILS领域专家,今日巴登巴登栏目对其进行了采访。

萨夫拉索夫认为,对于面临多种灾害威胁和处在历史和地理上的高峰带的大国而言,那些突如其来的破坏性的打击,可能对整体经济发展产生非常不利影响。“我们承认,当地市场发展的速度仍然很慢。经过25年的自由发展,整个中欧和东欧地区的保险市场平均普及率只有2.5%,而前苏联国家地区的数字要低得多,” 萨夫拉索夫提到。他认为ILS机制不仅可以为各国政府提供可靠的保护,获得更快地恢复灾后财务保障,而且有助于解决普及率低和整体未参保的问题。

Rate hikes unlikely: Caribbean cat facility

ORIGINAL PUBLICATION HERE

Notwithstanding the nat cat events of 2017, the Caribbean Catastrophe Risk Insurance Facility (CCRIF) is confident that its balance sheet is adequately set up to absorb the risk of high payouts in years of multiple extreme events, Isaac Anthony, CEO of CCRIF, told Baden-Baden Today.

“Even with the claims paid thus far in 2017 we have substantial reinsurance coverage in place in the event that we have to pay additional claims in this policy year,” Anthony said. “It is an extremely remote possibility that CCRIF would exhaust its reinsurance coverage and reserves.”

Cat bonds key to closing protection gap

ORIGINAL PUBLICATION HERE and at Baden-Baden 2017 dailies HERE

Sponsoring transparent and understandable cat bonds—including bonds that use parametric triggers—could become one of the most effective risk transfer instruments for emerging economies to resolve the developing issue of the protection gap at the macro level, Kirill Savrassov, CEO of Phoenix CRetro, a niche Bermudian ILS specialist, told Baden-Baden Today.

Savrassov believes this has become especially important for large countries with various types of event exposures, and those which are historically and geographically positioned in ‘peak zones’, and could face a sudden, devastating hit that could adversely affect overall economy development.

“We have to admit that the speed of local market development remains extremely slow in terms of penetration. For example, 25 years of insurance market free development brought an average of only 2.5 percent penetration across the entire Central and Eastern European (CEE) region, with much lower figures for former Soviet states,” he said.

Hurricanes will push ILS market to the next stage of evolution

ORIGINAL PUBLICATION BY Clive O’Connell HERE

Despite the losses in the ILS market, the recent storms have alerted a number of new investors to the existence of ILS as an asset class and sparked interest at a time when rates are likely to increase.

Insurance-linked securities (ILS) are at a crossroads. The next few months will show whether, as some in the market have foretold for years, ILS was a fad that would not survive its rst major test – or whether, as others have said, it has become a core part of the future of risk transfer.

Future Fund targets larger reinsurance investment allocation

ORIGINAL PUBLICATION HERE

Australian sovereign wealth investment fund, the Future Fund, continues to target an expansion of its insurance-linked securities allocation, through reinsurance linked investment exposure gained through ILS fund managers it already invests in.

The Future Fund allocates to reinsurance as part of its alternative risk premia strategy, making an initial $100 million allocation to ILS fund manager Elementum Advisors in 2015, and then adding insurance and reinsurance-linked investment manager Hiscox Re & ILS in early 2016.

The investor sees reinsurance and ILS as a largely uncorrelated asset class, and with two ILS fund managers onboard as access points to the market the Future Fund aims to grow this portion of its portfolio.

Geneva Association & IDF issue guide for sovereign risk financing/transfer

ORIGINAL PUBLICATION HERE

Insurance industry think tank, the Geneva Association (GA), in partnership with the International Development Forum (IDF), has released guidelines in support of sovereign risk financing and transfer, providing governments around the world with vital risk assessment frameworks.

The new paper, Guidelines for Risk Assessment to Support Sovereign Risk Financing and Risk Transfer, offers governments in all parts of the world with valuable guidelines for undertaking risk assessment that is fundamental to national risk transfer programmes.

The report explains that for risk transfer programmes to be effective, they require an accurate and comprehensive view and understanding of the risk context, which includes the possible impacts of both man-made and natural disasters on individuals, infrastructure and the economy.

ILS capital able to replace market’s substantial hurricane losses: Moody’s

ORIGINAL PUBLICATION HERE

Analysts at Moody’s expect recent hurricanes in the U.S. and the Caribbean to drive substantial losses for alternative capital providers, but the insurance-linked securities’ (ILS) sophisticated investor base is expected to be willing and able to replace any lost capital.

Moody’s, like numerous other insurance and reinsurance market analysts and observers, has underlined the test facing the alternative reinsurance space following the impacts of hurricanes Harvey, Irma, and Maria.

ILS, third-party, or alternative capital is now embedded in the global reinsurance market, and its increased presence and utilisation by insurers and reinsurers suggests losses for market players.

Cat bond hurricane loss estimates trend downward

ORIGINAL PUBLICATION HERE

Cat bond holders could pay out between $300m and ‘low-single-digit billion’ dollars as a result of recent natural catastrophes, fund managers say.

Catastrophe bond investors are facing losses that could reach “low-single-digit” billions of dollars following this year’s devastating hurricane season, according to insurance-linked securities fund managers.

Caribbean countries discuss multi-country cat bonds with World Bank

ORIGINAL PUBLICATION HERE

At a meeting of CARICOM Caribbean government leaders and international partners, hosted by the World Bank and International Monetary Fund (IMF), the topic of disaster resilience was high on the agenda and multi-country catastrophe bonds as well as other insurance solutions were discussed.

The recent destructive hurricanes that impacted the Caribbean were discussed, as well as the need for CARICOM countries and territories to be more prepared financially to respond to disaster impacts, to aid in resilience and recovery.

Risk finance and insurance are rising up the agenda again in the wake of hurricanes Irma and Maria’s destruction in the Caribbean.

Trapped ILS collateral issue may be overstated, suggests David Flandro

ORIGINAL PUBLICATION HERE

The fears of a substantial volume of ILS capital being trapped for too long so that it’s unable to be redeployed at the January 2018 reinsurance renewals, in light of recent catastrophe events, may be overstated, according to JLT Re’s David Flandro.

Following the devastating impacts of catastrophe events in the U.S. and the Caribbean, some market commentary has warned of the potential for insurance-lined securities (ILS) capital to be trapped as the losses develop, essentially making it unavailable to be deployed at the January 1st, 2018 reinsurance renewal season.

According to David Flandro, Global Head of Analytics at reinsurance broker JLT Re, the trapped, or locked collateral message is one mostly being spread by the traditional reinsurance players, and one that has a number of counter arguments.